My Business Got Served with a Lawsuit. What Should I Do?
It may seem like a bad dream, but it’s not. Someone just handed you documents titled, “Summons and Complaint” and the wrenching feeling in your stomach confirmed that you were just served with a lawsuit.
Stay Calm but Have a Sense of UrgencyYou have 30 days after the date you are served to file a response with the court. The 30 days include weekend days and court holidays. Time can go by quickly, so maintain a sense of urgency. Read the Complaint and determine the nature of the case. It may be a recent event or something that happened three or four years ago. Try to recall as much information as possible and take notes about what you remember.
Preserve RecordsNext, try to locate documents related to the lawsuit and store them in a safe place. If possible, make electronic copies. In California, litigants owe an "uncompromising duty to preserve" what they know or reasonably should know will be relevant evidence in a pending lawsuit. Litigation can take years to complete and it is much easier to preserve evidence now rather than later. It is also a good idea to record the names and contact information of relevant witnesses.
Consult an AttorneyIf the lawsuit is larger than $25,000 (i.e. outside of small claims court and limited jurisdiction), it's a good idea to consult an attorney. Most law firms offer free consultations, so any advice will be worth the price. It is possible to represent yourself, but that is not recommended. An experienced attorney will be able to spot key defenses or any procedural defects in the complaint. Be upfront and tell your attorney everything. The truth will come out eventually and it is better to know your potential liability early on.
Carry OnOne of the benefits of retaining an attorney is the ability to share the burden. Your attorney will worry about deadlines and appearances, so you can focus on your business. Litigation takes time and, in full honesty, money. But don't run out and file for bankruptcy just because you're in a lawsuit. A strong defense can decrease liability. You retain an attorney to defend your interests and a good attorney will do just that.